13-2IntroductionQuestion: What type of firm benefits from exporting?Both large and small firms can benefit from exporting The volume of export activity in the world economy is increasing as exporting has become easier thanks to the decline in trade barriers under the WTOregional economic agreements such as the European Union and the North American Free Trade Agreement

13-3IntroductionQuestion: What do firms that want to export need to do?Firms wishing to export must identify export opportunitiesavoid a host of unanticipated problems associated with doing business in a foreign marketbecome familiar with the mechanics of export and import financinglearn where to get financing and export credit insurancelearn how to deal with foreign exchange risk

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13-4The Promise and Pitfalls of ExportingQuestion: What are the benefits of exporting?The benefits from exporting can be great--the rest of the world is a much larger market than the domestic marketLarger firms may be proactive in seeking out new export opportunities, but many smaller firms take a reactive approach to exportingMany novice exporters have run into significant problems when first trying to do business abroad, souring them on following up on subsequent opportunities

13-5The Promise and Pitfalls of ExportingQuestion: What are the pitfalls facing exporters?Common pitfalls for exporters includepoor market analysispoor understanding of competitive conditionsa lack of customization for local markets, poor distribution arrangements, bad promotional campaignsa general underestimation of the differences and expertise required for foreign market penetration difficulty dealing with the tremendous paperwork and formalities involved

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13-6Improving Export PerformanceQuestion: How can exporters improve their performance? To improve their success, exporters shouldacquire more knowledge of foreign market opportunitiesconsider using an export management companyadopt a successful export strategy

13-7An International ComparisonMany firms fail to consider export opportunities simply because they lack knowledge of the opportunities availableBoth Germany and Japan have developed extensive institutional structures or promoting exportsJapanese exporters can also take advantage of the knowledge and contacts of sogo shosha, the country’s great trading houses

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